The Bank of England admitted most textbooks get money creation wrong

In a 2014 bulletin, the Bank of England explained that commercial banks don't simply lend out pre-existing deposits — they create new money each time they issue a loan, crediting a borrower's account with a deposit that didn't exist a moment before. This contradicts the standard 'money multiplier' story taught in many introductory economics courses.

— Michael McLeay, Amar Radia and Ryland Thomas (Bank of England), Money Creation in the Modern Economy — Bank of England Quarterly Bulletin, 2014 Q1

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